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Timken Reports Sales Down, Net Income Up for 2012
CANTON, Ohio -- The Timken Co. has reported sales of $5 billion for 2012, a decrease of 4% from the year before. Net income of $495.5 million, or $5.07 per diluted share, compares with $454.3 million, or $4.59 per diluted share, in 2011.
The sales decline reflects lower demand from the light vehicle, heavy truck, industrial machinery, and oil and gas sectors in the second half of the year as well as lower surcharges and the impact of foreign currency also contributed to the decrease in sales.
The increase in earnings is a result of several factors that include favorable pricing and lower material costs, Timkin said.
This year, the company expects to generate cash from operations of approximately $330 million. Sales are expected to fall 5% compared to 2012, driven primarily by continued lower demand. Timkins expects its operating performance is expected to remain strong, with all four segments maintaining double-digit operating margins.
"Our strategy of continuing to evolve in key markets and further diversifying our product portfolio with new products and additional repair services enabled us to achieve double-digit operating margins in all four segments, even in the face of lower volumes," said James W. Griffith, president and CEO, in a prepared statement. "Our diversification strategy was reinforced by the positive impact that the Drives and Philadelphia Gear acquisitions are having on our performance. The fundamental changes we've made to improve the structural performance in our business led to strong operating results and free cash flow generation as well as a strengthened balance sheet. Our strategic plan continues to serve us well in the face of uncertainty in the global economy."
For the full year 2013, Timken expects:
- Mobile Industries' sales are 5% to 10% low than in 2012 because of lower customer demand driven by the company's market strategy.
- Process Industries' sales to be relatively flat, based on a second-half recovery in Asia and industrial distribution.
- Aerospace and Defense sales up 7% to 12% because of increased demand in civil and defense indistries as well as critical motion control end markets.
- Steel sales down 7% to 12%, driven by lower demand from oil and gas companies as well as industrial end-market demand and surcharges.
- Timken projects 2013 annual earnings per diluted share to range from $3.75 to $4.05, which includes restructuring costs of 20 cents per share for previously announced plant closings.
Last year’s highlights Timkin cited:
- An increased repurchase program for up to 10 million of its common shares through 2015 and the purchase of 2.5 million shares for a total of $112 million.
- Completion of the acquisition of the assets of Wazee Companies LLC, expanding Timken services into critical motor and generator services and uptower wind maintenance and repair.
- Breaking ground on a $225 million expansion at its Faircrest Steel Plant here that will provide large bar production capabilities unique in America as well as improve efficiency and increase capacity in a core area of its Timken engineered steel product portfolio.
Published by The Business Journal, Youngstown, Ohio.
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